A big hurdle in selling retirement savings products is that most Americans have little understanding about how to better their financial health.
One retirement plan advisory firm's digital approach offers product providers a lesson on how to overcome that education gap and reinvigorate the learning process among prospective clients.
In January, AFS 401(k) launched MoneyNav, an online platform built to field retirement and financial questions.
MoneyNav was designed to span all demographics and provide tools to meet a wide range of preferences. The site includes blogs, videos, webinar recordings, online calculators, social media integration, worksheets for budgeting and other resources.
"[It's relevant] whether you're a 25 year-old millennial that is very adept at social media and spends a lot of time looking at Facebook, Instagram and Twitter, or a 60-year-old baby boomer that enjoys reading blogs or watching videos after dinner," says Alexander Assaley, managing principal of the Bethesda, Md.-based firm.
AFS 401(k) attempts to address all these generational needs through a holistic approach to retirement and financial wellness.
"Helping people create a sound retirement plan is critical," Assaley notes, "but without helping them with their short-term financial challenges such as growing debt, a lack of emergency savings or a budget deficit, it's [nearly impossible] to help someone understand how to improve his financial life.
It's a mission with personal significance for Assaley: at 17, his father passed away unexpectedly. He, too, had been a financial advisor, and his sudden absence left the stricken family with new financial hurdles and anxieties.
"My dad had always managed my family's finances, so while it was a hard time emotionally, it was also very difficult for us financially," he recalls. "We quickly learned how difficult it was to manage our financial lives."
LIKE A CURRICULUM
The agency's client base covers small to mid-size companies and includes employers with anywhere from around 100 to a few thousand employees.
"We've spent the last year testing MoneyNav [against] a lot of the assumptions and theories we have from meeting with employees and talking to them about their benefits and goals," Assaley says.
AFS 401(k) then used that input to build out the platform. Today it serves as the hub of its clients' financial wellness programs. Educational content is structure like a curriculum.
For example, Assaley says, "If I'm an employee and I want information about managing my day-to-day finances, there is a section on MoneyNav about budgeting [organized] by topics such as how to [create and manage] a budget, reduce debt and save for emergencies." Employees are then guided through a series of steps and actions items for each topic.
Other sections may cover subjects like retirement planning and are organized by topic in a similar manner.
The content is delivered through a variety of mediums, so for instance there may be a blog post with a corresponding video or a tool like an interactive worksheet. Data inputted into the worksheet can be viewed by the AFS 401(k) advisors, who can then follow up one-on-one with the employee who provided the data.
Of particular value to subscriber organizations are MoneyNav's data analytics features. These allow the agency to assess their clients' employees' financial goals and which financial topics are of greatest interest to them.
"Through surveys and the curriculum program, we're able to provide data and reporting for our clients to help them understand the impact that we're having on a global level," Assaley says.
"By the end of this year, we hope to be able to do that [for] specific clients. We'll be able to say, 'For your employees, these are the top initiatives they are working on and here is some of the progress we're making.'"
This type of data pull goes "above and beyond" traditional retirement plan metrics. For years, 401(k) plan sponsors have focused on the participation rates and employee retirement readiness.
"Where we're headed now is being able to say to employers that in addition to long-term financial achievements, here are some of the short-term improvements that your employees are making when it comes to their financial picture," Assaley explains. "These might include paying down student debt or reducing credit card debt."
Such efforts, he notes, would create value for both employees and their employers, who benefit from having a financially fit workforce.
INTEGRATING FRIENDS, FUN
When developing MoneyNav, the AFS 401(k) advisers conferred with technical experts and worked with a design firm to build the platform. Assaley was particularly intrigued by the behavior-altering methods espoused by Gabe Zichermann, an author, entrepreneur and gamification guru.
"The idea he subscribes to is that to really get people engaged, [an activity] has to include 1) friends, 2) feedback and 3) fun," says Assaley. "You can apply that to almost anything . . . Facebook, sports, even an art class."
Future buildouts of MoneyNav will be based on that approach. "The platform already provides feedback," Assaley notes. "Our next goals are to integrate friends and fun." For example, the firm is planning to include more financial wellness challenges as part of the financial education site's program.
Assaley reports that client response has been enthusiastic so far and that within the first six weeks of its launch the site had over 5,000 unique visitors.
"The instant interest and engagement has been exceedingly positive," he maintains.
But he doesn't expect MoneyNav to ever replace the face-to-face sit-downs and interactions that AFS 401(k)'s advisors have with their clients.
"We've seen that through this program we can engage people and help them develop better financial literacy," Assaley says. "But it's important to realize that, when it comes to financial and benefit planning, people are still looking for that human touch."